Engagement

Our engagement can take many forms, including management meetings, written correspondence and discussions on voting issues. Our ability to engage with companies can be limited, as the proportion of shares we hold in companies is generally lower than that of larger asset managers. With this in mind, we take a risk-based approach to engagement activity, considering the magnitude of risk and size of holding.

Engagement activities can be resource-intensive and under certain circumstances it may be appropriate to sell investments that have material adverse ESG issues, rather than engaging with the company in question. We set objectives for our engagement activities and track progress relative to these, on an ongoing basis if necessary.

We expect our third-party fund managers to establish and apply their own voting and engagement policies. As part of our due diligence process, we assess companies’ compliance with the UK Stewardship Code (where applicable), including their records regarding engagement, voting and the transparency of their stewardship activities. Where we identify that a third-party fund manager’s stewardship or ESG integration approach is not meeting the standards, we will either engage with them to try and improve their approach or divest from the fund.